The Logical Progression - CPC Testing on Offer-Based Ads

Administrator

Posted on 12.16.2012

After running a CPC-based ad campaign for some period of time,
know that “testing” is the logical progression — a next step, if you
will, for those demanding ever-greater performance from their
campaigns. Only through testing is it possible to consistently
generate “better” results (more revenue or awareness). But as
you might imagine, it’s not as easy as flipping a switch.

Understanding what can be tested is a significant
hurdle for many advertisers as the potential is
nearly limitless —from the use of exclamation
points to the inclusion of trademark symbols. The
savviest advertisers understand, however, that the
most powerful motivator is almost always the
“offer” and the possible variety and scope makes
them worthy of a closer examination.

When testing the performance of CPC ads that
include offers (e.g. price discounts, premiums,
guarantees or giveaways) it is essential to first determine
the sustainability. Often, advertisers reduce
or eliminate their potential return from ad spend
by underestimating the value of what it is they are
offering. As CPC ad prices continue to increase,
knowing your exact customer acquisition cost will
provide an opportunity to effectively flex creative
muscles without draining your ad budget.

Setting up and running CPC tests is a whole
lot simpler than it used to be. In fact, the search
engines and ad networks, where promotional
dollars are most commonly spent, actually encourage
testing and provide split-testing features
(see sidebar) for their advertisers. But in the end,
you still need something to test. Here are a few
offer ideas for inspiration.

Introductory Discount: There’s something in the
human conscious that conditions us to seek out
bargains. And, fortunately for advertisers, it’s a
powerful motivator in consumer purchasing decisions.
An introductory discount can be at any rate
and can apply to high- and low-priced products.
Make sure to have add-ons and up-sells ready, as
these provide an opportunity to increase the average
spend per visit.

Optimum Price: Consumers remain as price conscious
as ever. If your products or services have a
better price, and competitors are using price as an
incentive for site visits, definitely include price
within your ads. Consider testing these offers in relation
to the click-through rate (CTR) received in
the campaign and at the keyword level, making
sure to keep track of the impact on the acquired
customers’ assumed lifetime value.

Provide a Guarantee: Providing the confidence
necessary for a user to click-through is no easy
task in a text-based advertisement, but a guarantee
might be the incentive a user needs to ultimately
convert. For that reason, offering up a
guarantee (whether free shipping, 24-hour support,
etc.) within ads demands an advertiser’s
consideration. Ensure that the guarantee made
within the ad is mirrored or replicated on your
landing page to keep quality scores high and consumer
expectations in check.

Offer Premiums: In much the same way that
guarantees work, the use of premiums — added
on tangible benefits — can and should be tested
through CPC campaigns. The reason that including
premiums works so well is because they increase
the potential customers’ perception of a
product or service’s value. Take care when offering
premiums (as mentioned before) to not offer a premium
that is worth more than you are able to
spend. Google’s Enhanced Sitelinks provide a powerful
opportunity to offer premiums, which can
range in scope and breadth. Plus, it takes little in
the way of work to activate them on the SERPs.

Keep in mind that offer testing does not necessarily
need to be exclusive to keyword-based text
advertisements, but can be used in display formats
as well. In many cases, making an offer with supporting
visual creative assets will likely yield a
higher click-through than without.

Offer testing is not limited to CPC but that
model can provide an immediate indicator of
performance. Testing is the next logical progression
down the virtual road toward digital advertising
success. Test different types of offers and
variances in them, and you’ll be positioned for
greater success.